"A month-on-month growth in house prices is a sign of prosperous green shoots on the run up to spring"
- Nathan Emerson, CEO of Propertymark
Average UK house prices increased by 0.4% between January and February, compared with a decrease of 0.7% during the same period 12 months ago, the latest figures from the UK House Price Index show.
As a result, the annual change in house prices improved to -0.2% in the 12 months to February, compared with -1.3% in January.
Average house prices in the 12 months to February decreased by -1.1% in England and -1.2% in Wales, but increased by 5.6% in Scotland and 1.4% in Northern Ireland.
Of English regions, annual house price inflation was highest in the North East, where prices increased by 2.9% in the 12 months to February. London was the English region with the lowest annual inflation, where prices fell by 4.8%.
Nathan Emerson, CEO of Propertymark, said: “A month-on-month growth in house prices is a sign of prosperous green shoots on the run up to spring, which is historic for its higher demand from buyers and sellers. This is showing strength within the market and signs of a stabilising economy. Propertymark’s own Housing Insight Report showed that there was an 18% increase in new properties coming to the market. Furthermore, the number of mortgage approvals made to home buyers increased from 56,100 in January to 60,400 in February, according to recent Bank of England figures, showing that all signs are pointing in the right direction, which should provide aspiring or current homeowners with the confidence they deserve right now.”
Chris Little, chief revenue officer at finova, commented: “After a long winter, the market is finally entering a much-belated springtime. In February, the property market stood its ground, weathering the minor turbulence of a brief recession scare without any signs of strain. It may still be some time before we witness a strong market recovery, but thanks to stabilising swap rates and lower inflation, there is certainly the expectation that a more even balance between supply and demand will drive activity well into 2024. We have not yet seen the much-anticipated drop in the base rate, but the market mood music is upbeat.
“As we approach the summer months, borrowers will be keen to progress their purchase plans. Meanwhile, existing homeowners will be searching for a brand new deal as a record number of fixed rates close. In a market of intense competition, lenders must lean on technology to facilitate both a smooth and efficient property transaction for their customers. Whether that’s investing in a new pricing engine to respond to market changes at pace, or migrating to a new banking platform to self-serve product changes, lenders must invest in these tools early on to stay on top of their game.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “With inflation continuing to move towards the Bank of England’s 2% target, it’s time for the rate setters to be bold and start cutting interest rates. There is a sense that buyers and sellers are holding fire waiting for that first rate reduction, and when it comes, it will give the housing market a welcome boost.
“Falling interest rates have a knock-on effect on Swap rates, which underpin the pricing of fixed-rate mortgages. Five-year Swap rates rose this morning to 4.21% from 4.14% yesterday and until they are consistently falling, lenders are unlikely to reduce mortgage rates further."
